Pick of the Day: USD/JPY – Trade Closed

Trade Closed: 2008-06-24 11:12

It looks like my trade idea was good, but I made a mistake in execution with incorrect stop placement as USD/JPY barely touched 108.20 and closing out our trade before the Greenback dropped today on weak US housing and consumer data.

Total: -35 pips/ -0.5%

The mistake was a bit psychological as I was so sure the pair was ready to drop from the resistance line that I was not cautious enough about picking the area of where the trade would no longer be invalid. So, we missed out on some good profit, but it’s a good thing we reduced position size on this short term trade.

I am not surprised to so see weak data from the US this morning, and I am confident we will see more to come as the fall out from the credit crisis continues to work itself out. Also, with unemployment and wages hurting bad, I think the Fed may focus more on the economy rather than inflation. We will have to wait and see in the upcoming Fed statement after the interest rate decision this week. Stay tuned!

Trade Idea: 2008-06-23 09:52

PoD Chart

Good morning! Here is a quick, short-term idea on USD/JPY as the pair trends lower in a channel on the 4 hour chart.

The currency markets continue to look choppy as conditions remain uncertain on global economic growth and inflation. The Greenbacks’ strength this morning has brought the currency to the falling trendline drawn on the chart and it looks like it has found sellers once again around 108.00. This is probably mostly on technical selling as we lack event risk this morning during the US session.

So, I look to catch a few pips for today’s US trading session as I try to get in as see if the sellers will push the pair back lower towards 107.00. Also, because this is a day trade I will use half my normal position size to risk only 0.5%.

Short half normal position USD/JPY at market (107.85 or better), stop at 108.20, pt1 at 107.50, pt2 at 107.15

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Good luck and good trading!

  • enochbenjamin

    Richard Dennis used to ask his turtles “If your methodology is telling you to get short sugar tomorrow on the open, and you find out this evening over dinner that I am getting long sugar tomorrow on the open, what do you do?”

    Well this trade leads me down that same path. I usually agree with your trades but today my methodology tells me to be long.

    As I am writing this USDJPY just hit your stop.

  • NEWMAN07

    yup thats trading good friend, he shared his idea with us , the option is your to trade his idea or not , how ever its part trading and your personal understanding is also very important.

  • enochbenjamin

    Richard Dennis used to ask his turtles “If your methodology is telling you to get short sugar tomorrow on the open, and you find out this evening over dinner that I am getting long sugar tomorrow on the open, what do you do?”

    Well this trade leads me down that same path. I usually agree with your trades but today my methodology tells me to be long.

    As I am writing this USDJPY just hit your stop.

  • NEWMAN07

    yup thats trading good friend, he shared his idea with us , the option is your to trade his idea or not , how ever its part trading and your personal understanding is also very important.

  • clipmax

    Still a good idea from you! It’s a pity you put a too strict stop. I entered with stop at 108.50 and first pt has been just hit. Please post soon again

  • enochbenjamin

    Hindsight is always 20/20 – but in hindsight looks like your haunch trumped my methodology on this one. Sorry about the stop, but hey, you can’t win em all!

  • Pipcrawler

    “you can’t win em all”…. wouldn’t it be nice if you could??? Haha

  • clipmax

    Still a good idea from you! It’s a pity you put a too strict stop. I entered with stop at 108.50 and first pt has been just hit. Please post soon again

  • enochbenjamin

    Hindsight is always 20/20 – but in hindsight looks like your haunch trumped my methodology on this one. Sorry about the stop, but hey, you can’t win em all!

  • Pipcrawler

    “you can’t win em all”…. wouldn’t it be nice if you could??? Haha

  • stantony1

    I saw merit in the idea but I went a bit further and did a pivot point R1 on the 4 hours and found that the stop should have been at 108.35 for noise on the 108.21 R1 daily pivot point.

    Hit profit 1 as well.

    You have great ideas. I think its up to us to drill down and verify our own entry and exits though. Otherwise, will we ever learn to do this on our own???

  • stantony1

    I saw merit in the idea but I went a bit further and did a pivot point R1 on the 4 hours and found that the stop should have been at 108.35 for noise on the 108.21 R1 daily pivot point.

    Hit profit 1 as well.

    You have great ideas. I think its up to us to drill down and verify our own entry and exits though. Otherwise, will we ever learn to do this on our own???

  • king

    You are accomplishing the goal which you set out with this blog as you indicated; to help newbies understand the psychology of price movements so as help in the analysis of charts and thus trade on one’s own. As Pip Surfer had re-echoed once, teach a man to fish….. Personally, I see this postings as the laboratory for the theories of Babypips School. Hey, your efforts are very well appreciated. Many thanks.

  • king

    You are accomplishing the goal which you set out with this blog as you indicated; to help newbies understand the psychology of price movements so as help in the analysis of charts and thus trade on one’s own. As Pip Surfer had re-echoed once, teach a man to fish….. Personally, I see this postings as the laboratory for the theories of Babypips School. Hey, your efforts are very well appreciated. Many thanks.